Don't used Ai solution 4.12 A company is considering buying workstation computers to support its engi-neering staff. In today's dollars, it is estimated that the maintenance costs forthe computers (paid at the end of each year) will be $20,000, $26,000, $34,000,$38,000, and $42,000 for years one through five, respectively. The general infla-tion rate (F) is estimated to be 10% per year, and the company will receive16% per year on its invested funds during the inflationary period. The companywants to pay for maintenance expenses in equivalent equal payments (in actualdollars) at the end of each of the five years. Find the amount of the company'sannual payment.

Step 1: Adjust Maintenance Costs for InflationThe costs in today's dollars must be adjusted for…

Answered: 4.12 A company is considering buying…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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aa.2 A new treatment facility will cost $25,000,000. It will operate for 25 years, and an annual cost of $1,000,000. After 25 years, the facility will be sold for $5,000,000. All estimates are in constant 2023 dollars. The MARR is 5%, and inflation is assumed to be 2.5%. a) Calculate i’ b) Use constant dollars to determine the present worth of costs (PWC) after inflation.
Please answer correct calculation asap plz Don't answer by pen paper plz
Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of 5 years, will cost $100 million, and will produce net cash flows of $30 million per year. Plane B has a life of 10 years, will cost $132 million, and will produce net cash flows of $25 million per year. Shao plans to serve the route for only 10 years. Inflation in operating costs, airplane costs, and fares are expected to be zero, and the company's cost of capital is 12%. By how much would the value of the company increase if it accepted the better project (plane)? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answer to three decimal places. What is the equivalent annual annuity for each plane? Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answers to…
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 - S1,785,000 1 610,000 2 707,000 3 580,000 4 483,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 4 percent. If Anderson uses a required return of 11 percent on this project, what are the NPV and IRR of the project?
Given an effective semi-annual rate of 1.08750%, find the equivalent effective weekly rate. (You might need to keep more than the usual number of decimal places!) Question 3Answer a. 0.04119% b. 0.03870% c. 0.04161% d. 0.03911% e. 0.04036%
pls help asap on both
Your department is budgeting miscellaneous expenses for the next 5 years. Your best guess at the annual inflationrate is 3.9 percent, and the combined MARR is 15 percent. Expenses currently run $14,500 per year. Assume thatexpenses are end-of-year payments.a. Determine the then-current dollar amounts for years 1, 2, 3, 4, and 5.b. Determine the constant dollar amount for years 1, 2, 3, 4, and 5.Year 2005 2006 2007 2008 2009Rate % 18.853% 15.995% 10.665% "16.220% "12.723%574 CHAPTER 12 / INFLATION EFFECTSc. Determine the PW of the then-current dollar amounts.d. Determine the PW of the constant dollar amounts.
1 Enthle works in a call centre in Woodstock, Cape Town for 45 hours per week. Enthle earns a total of R4 725 per week and exerts an effort level of 0.6. This effort level translates into a disutility of effort cost equal to R35 per hour. In the event that Enthle loses her job, she knows it will take her 6 weeks to find another job at the same pay. UIF provisions also state that Enthle may claim R40 per hour for the first 6 weeks of her unemployment in the event that she loses her job Assume that call centres across the country decide to implement automatic menus for when customers call in, meaning that the number of call centre operators required decreases. This leads to an oversupply of call centre workers, and an extension of the expected duration of unemployment for Enthle to 10 weeks. Furthermore, due to the emotional stress of a retrenchment process, Enthle will suffer a psychological cost equivalent to R10 per hour if she loses her job. All other parameters remain unchanged. (d)…
2-14. A tennis racquet manufacturer is negotiating a lease on land to build a manufacturing plant. The price (0.1)D per charged will be determined by p = $450 94301 0:19 tennis racquet. The manufacturer faces variable costs of $25 per tennis racquet. Fixed costs of manufacturing are currently $25,000, in addition to the value of the lease being negotiated. (2.2) and 2011 a. For this situation, determine the optimal monthly 19D sales volume for this product. How To Tu We oil 202 snudism olditud moo b. How high can the lease be in order for the firm to bill make a positive profit? - slicmar
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A process plant making 5000kg /day of a product selling for $1.75 per kg has annual directproduction costs of $2 million at 100 percent capacity and other fixed costs of $700,000. What isthe fixed charge per kg at the break-even point? If the selling price of the product is increased by10 percent, what is the dollar increase in net profit at full capacity if the income tax rate is 35percent of gross earnings?
Your department is budgeting miscellaneous expenses for the next 5 years. Your best guess at the annual inflation rate is 3.9% and the combined MARR is 15%. Expenses currently run $14,500 per year. Assume that expenses are end-of-year payments. Solve, a. Determine the then-current dollar amounts for years 1, 2, 3, 4, and 5. b. Determine the constant-dollar amount for years 1, 2, 3, 4, and 5. c. Determine the PW of the then-current-dollar amounts. d. Determine the PW of the constant dollar amounts.

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